TALE OF THE SALE:
A small-to-medium sized company that supplies the medical device industry employed six salespeople. The team included a VP of Sales named Bob, who was in his late 30s and had been at the company since the day he walked off campus. It was a Friday afternoon at the Minneapolis-based manufacturing firm when the sales team, along with a few others, received the following email.
Hello folks,
Sorry for the short notice on this, especially on a Friday afternoon. I would like everyone to meet in the conference room in 20 minutes. Please don’t be late. See everyone in a few.
-Bob
VP of Sales
ABC Medical
A few salespeople and other email recipients were extremely curious to find out what Bob had to say. People speculated but nobody expected what came next. Bob kept it short and sweet. He let them know that he was offered a position with one of ABC Medical’s customers. The opportunity was too good to turn down. He was leaving but was also giving ABC a notice of 6 months. Along with the CEO, Bob would select his replacement – and they wanted to hire someone from within the company.
There were only two people on the sales team who were qualified to replace Bob. Sammy Sales and Sally Sales had both been with ABC Medical for about three years. Both had previous industry experience and always seemed to be neck-and-neck as the top-performing salesperson each month. The unofficial contest began while the rest of the company watched.
Now fast-forward to Bob’s last week with the company – and the day the new VP of Sales was announced. Sammy was talking to another salesperson and the plant manager, telling them how he was confident he’d be selected. After all, Sammy had sold $450K worth of product over the last six months while Sally had sold less than $200K. This wouldn’t be a hard decision for Bob and the CEO, Sammy claimed.
A few minutes later, Sammy was called into the conference room. It was awkward walking past Sally and into the meeting, but that wasn’t new. The last six month had been awkward, so he gave her a nod and received one back. It was a shared, “Here we go. Let’s see what happens” acknowledgement. Sammy entered the room and Bob asked him to shut the door. “Sammy,” the CEO said, “this was a hard decision to make. I’m sorry, but we decided to go with Sally as our new VP”. Sammy was shocked but kept his emotions in check. Calmly, Sammy then said:
“I respect you both and was convinced I would have this job since I sold more than twice what Sally has over the last six months. There must be an explanation for why you think Sally was the better choice.”
That’s when Bob explained how Sally had sold less in revenue but had closed very high-margin accounts. Importantly, Sally had aligned ABC Medical with strategic customers who provide significantly greater value than the lower-margin sales that Sammy had made.
Sally, Bob said, was thinking bigger-picture as a leader and not so much about short-term revenue. That’s why the company thought she would make a better VP of Sales. Sammy acknowledged that Sally probably deserved the position after applying that strategy. He said he respected the decision, Bob and the CEO thanked him for his understanding, and then it was time to get back to work.
LESSON LEARNED FROM THIS TALE OF THE SALE:
This tale of the sale contains lessons both for the company and for the salespeople involved. Sammy learned that if he aspires to sales management and leadership, he needs to think strategically instead of just about how much he’s sold in revenue. Sammy realized that all sales aren’t good sales and would try to think and act differently from now on.
There’s also a lesson here for the company, which paid commission purely on the revenue generated and not based on strategic closes and profitability. ABC Medical learned that commission plans need to align with company goals and that management must clearly describe its ideal customer so that salespeople can target the right types of business. If sales people are only paid on revenue generated by legacy customers why would they try to go find new and more strategic accounts? By learning these lessons, ABC Medical will have both a stronger sales-force and a stronger company.
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